Kevin Brennan: The Tories face a creative test in Wednesday’s Budget

This is part of a series of articles in the run-up to the Budget on Wednesday.

The creative industries are one of the great British economic success stories. We’re not only a world leader in culture and creative output, our creative businesses are a huge economic driver that contribute £87bn to the economy, incidentally more than either car manufacturing or aerospace, and employ two million people. Our creative businesses are admired and they export all over the world.

But this success doesn’t come about on its own and will not last without support. That’s why it’s vital that this economic powerhouse of a sector is not left out in the cold during tomorrow’s Budget.

With Brexit negotiations stalling, and the spectre of a calamitous no-deal scenario hanging over us, it is more important than ever that the government has a strategy in place to ensure the continued growth and success of our creative industries. But while the papers in the run up to the Budget have been littered with nuggets about investment in R&D for tech, driverless cars and housebuilding, there has been little to nothing about what the budget will offer our creative industries.

When the government made the creative industries the “fifth pillar” of their industrial strategy there was hope that the needs of this sector would be put centre stage. Unfortunately that hope has not yet been realised.

First among the concerns of the sector is the threat posed by a hard Brexit. Some 45 per cent of all our creative industry exports go to EU countries and 6.7 per cent of people working in the creative industry in Britain citizens of other EU nations.

In some of our strongest growth sectors, such as video games and visual effects, up to 30 per cent of those employed in the sector are EU nationals. We heard David Davis reassuring City finance workers they would get a preferential deal that met their immigration needs – but what about such a deal for the creative industries? Any Brexit deal which leaves us with severely diminished access to the single market and customs union and denies British businesses access to EU talent would be disastrous and compromise this strong record of growth.

Another major concern, all the more pressing with the potential loss of EU talent, is our growing skills gap both at secondary and FE and HE level. The effect of the EBacc is well known. There has been a nine per cent drop in take-up of arts subjects in the last year, with arts GCSE entries failing by 100,000 since 2014.

Despite design and designer fashion being the single-fastest growing sector in the creative industries, which saw its exports grow 53 per cent between 2014 and 2015, design and technology GCSE has seen a fall of 11 per cent since 2016. The UK Commission for Employment and Skills estimated in 2015 that the creative sector would need 1.2 million new workers by 2022 to sustain growth. With our talent pipeline being choked off at secondary school level then this potential will be very hard to fulfil.

The other factor critical to growth is access to finance. Despite the success of the creative sector, many businesses still struggle to access the finance they need to get started, and scale up, because a lack of experience and understanding from finance about the opportunities in the sector.

The Budget would be a major opportunity to champion the investment opportunities offered by the creative industries and to show leadership by government putting serious investment into creative clusters across the country, as recommended in the recent Bazalgette review. Rather than a new £500m five year creative clusters programme, as Bazalgette recommended, the government has announced a much smaller £80m fund, half of which will come from industry rather than government. This is less than a tenth of the £1bn cultural capital fund to invest in creative and cultural infrastructure and development that Labour committed to in our manifesto.

Ministers talk the talk on supporting the sector but this Budget is a test of whether they mean it. Creative talent must be nurtured and we cannot afford to leave the creative industries out in the cold.

Kevin Brennan is Labour’s shadow minister for arts and culture.